Obama Pushes His Energy Plan

06/25/2009 |

The Baltimore Sun, Maryland

Paul West, The Baltimore Sun

June 25, 2009

Jun. 25--WASHINGTON -- -- President Barack Obama defended his contention Wednesday that a massive climate-change measure would greatly reduce U.S. dependence on foreign oil, though government figures raise questions about whether he is overstating its impact.

Obama has intensified his public lobbying effort ahead of an important House vote this week on the Democratic energy proposal, designed to reduce greenhouse gas emissions sharply by 2050. The sweeping plan is the president's most ambitious legislative priority, along with his push to overhaul the nation's health care system.

In a White House interview with The Baltimore Sun and five other newspapers, Obama said that if the House proposal becomes law, "we are greatly reducing our dependence on foreign oil." The day before, at a Rose Garden news conference, Obama also made reduced dependence on foreign oil one of his primary selling points.

A check of government statistics, however, suggests that Obama might be magnifying a relatively modest improvement. Estimates initially provided by the White House showed that the reduction in oil imports advertised by the president would amount to a cut of roughly 10 percent in 2030. Last night, aides provided additional estimates from an outside group that tripled the expected savings.

"All this stuff takes a while to ramp up," Obama said during a half-hour discussion in the Roosevelt Room. "This is a huge ocean liner, the U.S. economy, and the question is, can we start changing the direction of that ocean liner? Ten years out, it's not going to necessarily look as if the changes are massive. Twenty years out, suddenly you start really getting huge impacts. Thirty years out, you had a transformative difference in the economy. And that’s how we've got to look at it."

He said it was "absolutely" valid to talk about benefits that are two decades away, because "20 years isn’t that long in the life of a country. ... I remember where I was in 1989, and you know what? If we had started then, we'd all be pretty appreciative now."

As part of what the White House is calling "Clean Energy Week,” the president sat down with a half-dozen reporters, who were invited to meet with him to discuss energy.

Obama said that the combination of the House bill and his recent proposal Ito improve auto efficiency would save the U.S. "the equivalent of what we import from the entire Persian Gulf."

The president turned to an aide, Heather Zichal, who said the climate-change measure would reduce U.S. oil consumption by 700 million barrels in 2030. The White House later corrected that figure, to 245 million barrels a year by 2030, citing a report by the Environmental Protection Agency.

That's less than one-third of the amount the country currently imports from the Gulf. In 2008, the U.S. brought in 845 million barrels of crude oil from the Gulf, according to the Energy Information Administration, an arm of the Energy Department. In 2030, that figure would be about 584 million barrels, according to EIA.

The EIA has projected that total U.S. oil imports will drop over the next two decades, in part because of action taken during the George W. Bush administration to increase the production of ethanol and other bio-fuels. By 2030, oil imports will represent 40 percent of total U.S. consumption, down from 58 percent in 2007, according to an April EIA report that took into account Obama’s economic stimulus package but did not factor in either the energy legislation or his auto plan.

According to White House estimates, Obama’s tougher fuel efficiency standard, announced last month, would save 1.8 billion barrels over the life of the program. It applies to vehicles sold between 2012 and 2016, but it is not clear what effect, if any, it would have on U.S. energy consumption in 2030.

Last evening, the White House seized on a new "preliminary assessment" of the House legislation, released Wednesday by an outside group, the American Council for an Energy-Efficient Economy, to buttress its claims.

The group, which analyzed portions of the House measure not calculated by the EPA, came up with just over 1 million barrels per day in reduced energy consumption in 2030. The additional energy savings would come from relatively minor portions of the legislation that would direct money to new investments in transportation planning and research on plug-in hybrids and other electric-powered vehicles.

Adding that figure to the EPA estimate, the White House came up with overall energy savings of nearly 2Imillion barrels a day, or more than the amount projected for Persian Gulf imports in 2030.

A cap-and-trade system to reduce greenhouse gases is the centerpiece of the climate-change measure, which Democratic Speaker Nancy Pelosi has scheduled for a vote this Friday by the full House. The legislation, co-authored by Democratic Reps. Henry A. Waxman of California and Edward J. Markey of Massachusetts, is 1,200 pages long and has been the object of furious horse-trading in Washington. It is designed to promote a clean-energy economy and reduce pollution that contributes to global warming.

In his comments to the reporters, Obama said the measure would create a market for more efficient appliances and buildings and would put money in the pockets of consumers by driving down energy bills.

Republicans opposed to the cap-and-trade plan have tried to attack it as a new "light-switch tax." But the president pointed to a recent study by the Congressional Budget Office that estimated a lower out-of-pocket cost for consumers than many had expected.

According to CBO, the net cost to the average family would be $165, though the poorest families would actually benefit by an average of $40, while the cost to wealthier families would be $340 a year.

In terms of the added expense, "you’re talking about maybe a postage stamp a day," Obama said. "Historically, what’s happened is technology actually moved much faster than people anticipated, so the costs are likely to be significantly lower."

He also said that oil companies don’t have to worry about the impact of the proposal on their business.

"Oil companies aren’t going out of business any time soon. ExxonMobil, I think, will have a very healthy market for whatever oil it has to sell," he said.

At the same time, "if we don't start expanding our clean energy sectors and improving efficiency,” Obama said, "ExxonMobil could [be] having huge windfalls, because a barrel of oil is 200 bucks."